C = 195 +0.15(Y - T) \= 215 G= 80 NX = -40 T= 120 Y* - 475 What policy could the Federal Reserve implement to eliminate the output gap? Increase G by 28 Increase the reserve deposit ratio Increase T by 188 Buy Bonds

C = 195 +0.15(Y - T) \= 215 G= 80 NX = -40 T= 120 Y* - 475 What policy could the Federal Reserve implement to eliminate the output gap? Increase G by 28 Increase the reserve deposit ratio Increase T by 188 Buy Bonds

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

C = 195 + 0.15(Y - T)
\=215
G= 80
Ot = XN
T= 120
Y* = 475
What policy could the Federal Reserve implement to eliminate the output gap?
Increase G by 28
Increase the reserve deposit ratio
Increase T by 188
Buy Bonds

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